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tv   [untitled]    October 13, 2011 1:00pm-1:30pm PDT

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companies. frankly, i want to frankly, i want to see if there is a different way for store accomplish our goals. the ordinance i have introduced eliminates the use it or lose it nature of h.r. 8's and the so- called january problem, which is what happens when an employee tries to get reimbursed for a health care need at the beginning of the year after a one-year time of money has expired. we achieved the goal in the legislation by requiring that at least a year's worth of health care dollars must always be available to the employee on a rolling basis. the ordinance also strengthens notification requirements of employers, which has been an issue, by requiring that they occur on a quarterly basis in appropriately which is an information about have access accounts is permanently posted. the situation the "wall street
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journal" has written about a round false advertising makes it clear that employers that charge and state that they are charging a healthy san francisco surcharge but not actually spending it on health care -- that that could lead to very negative consequences. the ordinance makes a number of other changes, but i want to mention one last provision, which is meant to address the situation in case this amendment is challenged in court and the court upholds the changes. i want to make it clear that the ordinance would then revert to a supervisor campos -- revert to what supervisor campos has proposed. if we could move relatively quickly to public comment, i know a lot of folks have taken time out of their busy schedules to be here, and i would like to get feedback from the public on this. supervisor campos: thank you. we will be happy to proceed to that, but before we do that, i want to make a couple of points. first, i want to thank the members of the audience who have
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been waiting for this matter, and i know that this issue has been an ongoing issue for many months. we introduced my original legislation in may of this year, so that was five months ago. but i want to make a couple of points. i appreciate the work that president chiu has done in his legislation. i certainly agree with the spirit of what he is trying to do, but let me make a couple of points about the differences between his legislation and what my legislation, the original legislation, tries to do. first of all, with respect to the protection to consumers, my legislation is actually the only legislation that requires that where a charge is made on a customer, where the charge is made -- when you go to a restaurant, as an example, and you are told you are paying an additional percentage so you can provide health care to your employee, but -- that in fact
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that percentage is paid to health care. president chiu's legislation requires that the expenditure is not made by that employer -- the restaurant, for example -- they have to provide notice that that is what happened. but there is, again, no requirement that the restaurant actually meet the commitment that it made to that consumer that the money will be spent on health care. the second point -- and this is a fundamental point that goes to the heart of where there is a difference of opinion -- is the question of whether or not as these accounts are in existence, an employee, who was the beneficiary of these accounts, is going to have the opportunity to accrue money in that account through the time of employment. president chiu's proposal limits
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the amount that is a crude to four quarters or one year, and that is where there is a fundamental difference of opinion -- limits the amount that is accrued. those of us that proposed the original legislation believe it would not provide meaningful access to health care to limit what an employee can accumulate. the four months that president chiu allows for would not provide much coverage. we have heard what it would cost to spend a night in a san francisco hospital -- close to $20,000. if you are a woman delivering a baby, you are talking about spending at least $16,000, and that is if there are no complications. i do not believe that it is fair to say to a female worker in some of these businesses that even if they work for four years, that they will not have enough money to pay for that
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delivery. what is interesting about the discussion that is happening -- and this is the last point that i am going to make because i do want to hear from the public -- is putting this in the context of what is happening at the national level. what this legislation and the people supporting the legislation that tries to limit the services that are provided to a worker -- what these proposals are essentially doing is something that is to the right of what the united states congress and the president of the united states have done. the federal law, the health care legislation that was passed by president obama and that was approved by the u.s. congress, is actually moving away from reliance on these accounts. under that federal law, if you, as an employer, beginning january 2014, do what these businesses are doing in san francisco and rely solely on these accounts to provide health care to your workers, you will be charged a penalty under
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federal law because there is a recognition by the federal government that these accounts do not provide adequate health care. the u.s. congress and the president of the united states have made that very clear. so it is an ironic situation that we find ourselves in this predicament where you have members of this board, where you have the business community that are actually pushing for something that is to the right of what the u.s. congress has proposed. i think it is unfortunate. i think it is inconsistent with the principles that drove us to pass universal health care. i think that it is really the wrong policy to try to protect a dinosaur, which is what these accounts are -- a dinosaur that will go extinct in the very near future. that is not what san francisco should be about. it should be about protecting workers, protecting consumers, many of whom are paying additional fee's for something
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that is not being provided and lastly, should be about leveling the playing field for the vast majority of businesses that are complying with this law appeared with that, president chiu, you have the cards for speakers. supervisor chiu: i would like to take a moment to address a couple of the points that were just made so we do not forget them. first of all, with the issue of consumer fraud, my language is actually very specific. it states that there is an employer that imposes a surcharge to cover some of the cost of health care, every employer that does that, that says they will have a surcharge, is required to provide to the city the exact money collected from the surcharge and the amount spent on employee health care. it turns out that the amount collected from customers is greater than what is spent on employee health care -- i will read the language -- our city agency shall refer any potential cases of consumer fraud to appropriate authorities.
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i think that is quite clear. we are saying we do not want to have employers in the city that state they are taking money from health care to use the money for something other than health care. one other thing i want to mention is, obviously, this is an ongoing discussion. there is supervisor campos' legislation in front of the mayor, and we will see what mayor lee is going to do with it. although i am open to changes in the legislation, it is important to note that we will have a federal health care system that will be reformed in two years. the fact of the matter is we have to figure out what to do from now until 2014. i will also mention that federal law -- president obama's legislation, which i absolutely support -- does not apply in many instances to employers under 50 employees. we will still have to figure out that piece. i certainly disagree with the characterization that what we are introducing today is
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open-"> -- what we're introducing today is " to the right of what congress is doing -- is "to the right of what congress is doing." all that said, why don't we move to public comment? i have a number of folks who i know have been waiting here. [reading names] if we could ask folks if you want to line up on the right side of the room. i will continue to call cards, and other folks who wish to speak, if you have additional speaker cards you would like to submit, we can do that. or after folks who have submitted cards have spoken, you can continue to line up. >> i was going to say good morning, but good afternoon. i am a small restaurant owner in
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the city, and was involved in different discussions -- the first discussions with the first healthy san francisco ordinance and task force several years ago, so i am pretty familiar with those. i want to thank everybody for being willing to talk about it because the devil is in the details, and it is a super complicated area. to give you some perspective, i fully believe that employers should provide health care and that it is the morally right thing to do. personally, we provide medical, dental, and vision insurance defaults that worked an average of 30 hours a week, whether our -- whether hourly or salaried. in the case of our insurance plan, a 29-hour a week worker is not eligible to be on our insurance plan per the guidelines. the lowest we can find is
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somebody working on average 20 hours a week. so i think you absolutely have to have a vehicle. i of the stand -- i understand that the hra's are something that are blocked out, but in this industry, two years is a lifetime, and we might not be around to discuss it. i strongly believe in providing health care. in the past two years, i personally lost money and had to take out some loans from some banks to keep two of the restaurant opened. we made those projections based on the existing rules and guidelines that the city had agreed to. if we change the ordinance to far -- and i am definitely in favor of everybody complying and they're being reza -- regulations and new guidelines, but if we change it too far, we will not be able to meet those commitments. we would potentially have to look at stopping to play the
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game. i certainly do not want to sound like a job-creator republican. i am just saying that at a certain point, if a business goes in the red and cannot make that commitment, there are some severe consequences. i wanted to go on and say that i strongly believe that what we put together four years ago did lack some things. i think there were some notification guidelines, and i think we need to look at holding it for an annual time, which is consistent with the insurance plan and the annual city reforming plant. so thank you very much, you guys. supervisor chiu: thank you. >> good afternoon, supervisors. jim lazarus, san francisco chamber of commerce, representing 1500 local businesses, 80 percent of them -- 80% of them small businesses. we support change to the ordinance, and we appreciate the efforts of supervisor campos
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since last may and now president chiu and the mayor in considering alternatives. it is clear that a consensus approach needs to come. i think there will be meeting today on the subject, and if we can work through this, we can come up with changes to the ordinance that benefit the employees while retaining economic viability for many of our employers. we support amendments to the health care security ordinance that will improve notice to employees about benefits and account balances. we will support amendments that require employees -- employers to maintain a balance on a rolling annual basis. we support the amendments that will retain the remaining benefits after separation of employment for 90 days, and efficient notice to the city 15 days after the close of every quarter of expenditures made to
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the health care security ordinance. what we cannot support is putting tens of millions of dollars away, locking it up every year, unexpended, because that is the history. this economy cannot afford putting tens of millions of dollars of small business funds in accounts and spend -- unspent, especially in this economy. we urge you to allow a accrual basis, a rolling balance, better notification so that employees can access their funds without tying up tens of millions of dollars. supervisor chiu: thank you. next speaker. >> i operate the city club of san francisco downtown. i have 65 employees. i pay health insurance, dental
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insurance, disability insurance and eye insurance. we did not offer a surcharge to our members or guests, and i am in support of david chiu's amendments. i think we need to be going after the people that are using the loopholes in the system and not changing the whole business climate in the city to go to direct deposits. hra's work. my employees use them when they need them. i had five babies born in the last six months at my club, and everybody has been paid for it. thank you. >> hello. i own a third-generation san francisco business providing jobs to persons who were to take care of seniors in the homes of
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disabled and terminally ill. i am here to support supervisor chiu's proposed ordinance since it allows my company to provide health access and also allows me to continue to invest in jobs meeting my obligations with san francisco taxes. i would like to make reference that my business is in daly city, not in san francisco. my hra account average yearly usage is 33.3%. the money's not spend i have invested in my business and continue to invest in jobs. jobs are my business because these are my caregivers, and they receive payroll. the accrued monies are available to employees. i roll over the money. i also have, when someone becomes my employee in san francisco -- they receive a full
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package of information from my insurance company on the hra. they can purchase health insurance. they can use the money for covert. we have no limitations on what they use the money for. they also get quarterly notices. we get quarterly notices and often notify them.
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for 20 hours a week private pay, but if you take away my ability to pay those people by forcing me to put away money that my employees do not want, by evidence -- i have put away my documents. you can see my audits. if you want a good example of someone who has not broken the law and has tried to provide health access and does provide health access, i have provided glasses recently to someone who had money three years ago. i just paid for a knee surgery for someone who had money for three years in their account. i have not -- i have never limited those moneys to someone, but the accrual basis of paying out this money allows me to stay in business and i also have taken out many loans to stay in business the last three years. bank of america just said, "your
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credit line is due 12/25." if this goes through, thank you. you have put the nail in the coffin. supervisor chiu: before the next speaker, let me call up a couple of folks. [reading names] why don't we proceed to the next speaker? >> thank you, supervisors. good morning. good afternoon. i am with the laborers corporation of north america. we represent construction workers and public employees. we represent the working poor who are all union members. i want to applaud your efforts, supervisor campos. i believe what your doing, especially with the fraud, is commendable. san francisco has always led the way on health care discussion. i think we should continue to lead the way. we support what you are doing
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here today. we view it this way -- the civility at city hall is valuable to us, especially in the construction industry. it is important for us that we all work together. i will give you an example -- one of the most employee -- important things to the employees we represent in recent history has been reforming the pension system. when we needed help, the business community in san francisco rose to the occasion and worked with us to develop a consensus plan for reforming the pension. at the same time, now, we need to work together to develop a consensus plan for closing this loophole. we want no fraud. it is disgraceful that we have seen fraud perpetrated on the consumers of san francisco. it is unconscionable that that would continue. we need to level the playing field. i think that both of you are willing to do that. finally, it is critically important that we have real health care solutions for the citizens of the city and county of san francisco, whether they
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be in a union or not. we are here today to support supervisor chiu for helping us work towards crossing the goal line together. we have got 99 yards since supervisor ammiano began this. david campos picked up the ball and continued to carry that torch. but we want you all to work together and continue working with labor to continue that today. supervisor chiu: one of the biggest differences between what -- supervisor campos: one of the biggest differences between what president chiu has proposed and what i have proposed, and you have a lot of people here talking -- good people, trying to figure out what the answer is, but the big difference is that president chiu's legislation, which is supported by the chamber, sets a trap of a year in terms of the amount that is accumulated. you said that you represent a lot of working for workingpoor
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-- a lot of working poor. a cap of one year means $4,300. are the laborers in support of capping the amount accumulated in these workers' accounts? >> no, we are in support of david chiu raising the issue for the sole purpose of working together on a solution, and i think i heard him earlier say he is open to amendments, as i believe you are, too. the purpose of us coming today was to encourage you both to carry the ball across the goal line together. supervisor campos: so you are not in support of limiting what is accumulated? >> [inaudible] >> hello, everyone.
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i just want to throw my support also behind president chiu's oven mitts or proposals. the main thing i want to get to is definitely notice is super important. we do that. we provide insurance, but the idea of forcing a business to accrue virtually unlimited amounts, which could be in the campos thing, it is not tenable for a business to do that. we do not have those kinds of funds. it is about putting people to work. i cannot comprehend the idea of being forced to spend something that people are not using. people use the money, if people need it, that is fine, but it is not used, it is not used, and we should not be forced to spend
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this extra amount. that is one reason why i support the proposal. thank you. -- why i support president chiu 's proposal. thank you. >> i am a second-generation small business owner. i placed chefs in restaurants. i would like to make a couple points about the effect of forcing restaurants to accrue a large amount of money, taking it out of their operating capital, and that is many of our restaurants. this is not the only one, are living very close to the edge. it is the equivalent of hand to mouth. if you take away more, we will have some losses. from my standpoint, more importantly, there is the question of the more or less the
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zero fund financing in restaurants. only so much comes in. you cannot ask for more money. if you take it from one place, it goes off another. what i am is saying is it is going off the salaries of management and chefs, which means we are no longer in a place where we can compete with other food cities like new york and chicago where chefs and managers get $10,000, $20,000, $40,000 less than they did to do the same jobs in san francisco. our restaurants are our anchors. midwestern cities actually pay some restaurant groups to bring in their restaurants. we need to support hours. my second point is -- and i have said it before -- that i as a small business person and doing very little in san francisco, and that is because restaurants
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have not got the money. they are holding very close to their best -- they have to -- they are holding very close to their best -- they are holding very close to their vest. they have to. i am not the only one we're talking about. linen companies, we're talking about. small consultants, designers. these are people not seeing the money that is available. please consider that when you are considering the accrual accounts. please consider that when you consider further legislation regarding restaurants. that is all i have to say. thank you. >> i am sure you guys are tired
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of hearing from me. i have been in business 35 years in san francisco, and this is the first time legislation has threaten the viability of my business. i want to be really specific. this supervisor campos, who i respect as a human being, if this legislation passes, i will have to lay off between 35 and 40 people, and i will have to tell those people they are losing their jobs because of his amendment. i will have to tell them to write him and ask why they no longer have a job. what does not get talked about enough is the heart of the difference between supervisor campos' amendment and the one proposed by president chiu, which is the difference between accrual and expenditure. that is everything. we have 120 employees. the cost of the hra increases
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when you go over 100 from $1.30 an hour to $2 7 cents. we pay full health insurance for all our full-time help employees. we have a payroll cost of $2 million. this amendment would increase our costs by 15%. we already pay $100,000 for full-time employees. it is an additional $200,000 for the part-time employees. by going over the 100-employee limit, we have come to the equation that in order to open that, it would cost us $100,000 a year if supervisor campos' and then it was in place.
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with the accrual method, we can calculate that cost based on anticipated usage would be between $25,000 and $50,000, and we're willing to take that risk. the first thing we will do, i guarantee you, is we will get below that 100-employee threshold by closing a store. immediately 20 people will lose their jobs. that is a direct consequence of the difference between a cool and expenditure. the other thing i want to say really quickly is you keep talking about how this money -- you know, someone has to wait four years for pregnancy, etc., but what never is discussed is that the great part of healthy san francisco is the clinics you have built. few people understand the relationship between health cost expenditures and help the san francisco. healthy sanford cisco for our


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